Buying a home in Hawaii

[Rick Figurasin]

I'm moving to Hawaii for work and looking to buy a home in Oahu. I found a 3/2 that is walking distance to work, is close to a lot of stores, and in a good neighborhood. I plan to be there for 4 years and depending on work, may consider renting it out afterwards. The problem is that I'll be paying $4500 a month which includes PITI/HOA. The benefit is I can put $0 money down with a VA loan and save my cash for another investment property. Of course if I decide to down 20-25% (about $130k), the monthly payment drops to $3700. Currently, rent in the area is going for $3000-$3500.

Is it worth it to save the cash for another down payment and deal with a high monthly payment (that may not cash flow in four years)? Or put a 20% down payment and not have the capital now to invest in other properties for another 2 years.

Also do you think the current market outlook with the fed and interest rates will negatively/positively affect me if I buy a home in the next 1-2 months?

[Robert Koncal]

Quote from @Rick Figurasin:

thank you for all the responses! the area I am looking at is the Pearl Harbor area. 

it seems the consensus is to do $0 money down, pay the higher monthly, and keep the cash for possible investment opportunities. what are your guys thoughts on renting instead? if i rent for around $3000 in the area, i can save even more for investments (though I will be giving up on equity, future appreciation

 Real estate comes with 4 different ways how you can make money with it, generally speaking.

1. Cashflow - you rent the property, cover all f the expenses, and profit on what's left over
2. Appreciation - property goes up in value over time
3. Principle paydown - renter pays down your mortgage
4. Tax benefits - I am not a CPA so don't want to go into detail here. 

You don't hit any of these four if you rent. So, in my opinion, the question you need to ask is, do I want to make money, or do I want to spend money? And I am not saying it is not ok to rent. It is but I truly believe if you plan to stay for more than 3 years, owning a property is a better option, and here is why. 
Let's say the purchase price for the property is for example $500,000. The average appreciation on Oahu for condos and SFH combined in the past 38 years is 4.93%. Let's say this year the properties won't appreciate as much and we will see market stabilization therefore we see only 3.5% appreciation in the next 4 years on average. So, you will "make" about $17500 per year on this property. The difference between renting and owning as you mentioned is $1500/mo so that's $18,000/year. The difference is $500/year. Do you think you can gain that $500 on taxes? If so, you're better off owning from year one. And it is going to get better every year.

Just my 2 cents. Enjoy your day! If you have any questions, please do not hesitate contact me.